DSE to urge BSEC to up brokers in boardHM Murtuza
The Dhaka Stock Exchange has decided to propose that the Bangladesh Securities and Exchange Commission should increase the number of representatives of member-brokers in the bourse’s board once it is demutualised.
The bourse made the decision at a board meeting on Tuesday, DSE sources said.
On September 10, the BSEC finalised the demutualisation schemes of the Dhaka and Chittagong stock exchanges, keeping four posts for the member-brokers in the boards of the bourses.
The capital market regulator also set the board size of the bourses at 13 members.
The commission, however, decided to issue directive regarding the schemes to the bourses by September 29 after hearing the DSE and the CSE in September 24-25.
The bourses had proposed a 19-member board in their respective demutualisation schemes submitted to the commission on July 29.
The bourses had proposed that nine member-brokers would be in the board, while the rest 10 posts would be filled by the independent directors. The bourses had proposed one-year term for the independent directors.
But, the BSEC finalised that four directors would come from member-brokers, seven from independent criterion, one from strategic investors and the rest one chief executive officer.
The tenure of the independent directors will be three years.
On Tuesday the DSE decided to seek for a review as the bourse is giving another try to increase the number of representatives of member-brokers in the board.
The DSE sources said the bourse in a hearing at the BSEC on September 25 would propose a 15-member board of the bourse.
‘It will propose six posts for the member-brokers, eight posts for the independent directors and rest one for chief executive officer,’ said the sources.
A DSE official said, ‘We want a better combination.’
‘If one or two member-brokers remain absent in a board meeting for any reason, our representatives in the board would be reduced to one-third against independent directors. In such situation, our logical opinion in the board might be ignored,’ he said.
The Demutualisation Act- 2013 was passed in the parliament on April 29 in a bid to separate the bourses’ management from the ownership.
After the September 10 decision, the BSEC also asked the DSE to issue a declaration that Nikunja Bhaban, a 13-storied building at Nikunja in the city, is a property of the bourse.
The BSEC also asked the bourse not to issue any tenancy allocation of its floor spaces to its member-brokers before the end of its demutualisation process.
Earlier on August 27, the BSEC asked the DSE to give details about its fixed assets, including the Nikunja building. The DSE later replied that it had allocated floor spaces to its members as tenancy allocation.
The DSE in its scheme showed Tk 4,200 crore as its asset value and Tk 1,803 crore as paid-up capital while the CSE showed Tk 634 crore as its paid-up capital.
As per the demutualisation schemes finalised by the BSEC, the bourses have to dissolve the present boards after getting registered with the Registrar of Joint Stock Companies and Firms within the first week of November and the bourses have to form interim boards. The bourses then will form new boards in February next year after holding extraordinary general meetings.
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